Location: Houston-The Woodlands-Sugar Land, TX | Metro: Houston-The Woodlands-Sugar Land, TX HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,210 |
| 1 Bedroom | $1,240 |
| 2 Bedrooms | $1,470 |
| 3 Bedrooms | $1,980 |
| 4 Bedrooms | $2,460 |
| 5 Bedrooms | $2,854 |
| 6 Bedrooms | $3,196 |
| 7 Bedrooms | $3,452 |
| 8 Bedrooms | $3,625 |
The analysis for ZIP code 77508 reveals limited data points for a precise Section 8 cap-rate calculation, yet we can still draw some conclusions based on the available figures.
The Fair Market Rent (FMR) for a 2-bedroom apartment in ZIP 77508 for fiscal year 2024 is set at an annualized rate of $1330 per month. This figure represents the maximum amount that a landlord can charge for a Section 8 rental unit. However, without specific data on the median home value, it's challenging to calculate the exact cap-rate. The cap-rate is typically derived from the Net Operating Income (NOI) divided by the property value. For our purposes, we'll focus on the gross yield, which is the annual rent divided by the property value.
To illustrate the gross yield, let's assume a median home value in the area. If we hypothetically set the median home value at $266,000 (twice the annualized FMR for simplicity), the gross yield would be approximately 5%. This calculation is made by taking the annual rent ($1330 * 12 months = $15,960) and dividing it by the hypothetical median home value ($266,000).
However, the lack of market rent data makes it impossible to provide a comparison scenario. In general, market rents tend to exceed the FMR rates, which would imply a higher gross yield if we had that figure. Given the absence of market rent data, we cannot perform this calculation.
The renter density and days on market (DOM) figures are also unavailable, which would normally help us determine how realistic these scenarios are. Renter density indicates the percentage of renters in the area, while DOM provides insight into how quickly properties are rented out. These metrics are crucial for understanding the local housing market dynamics and the feasibility of renting through Section 8 versus the private market.
In conclusion, based on the provided FMR of $1330 per month for a 2BR apartment, the gross yield against a hypothetical median home value of $266,000 is approximately 5%. A more accurate analysis would require market rent data and local housing metrics such as renter density and DOM. Until these details are available, the FMR-based gross yield remains the most reliable indicator for potential investors in ZIP 77508.
Data Sources: FMR data from HUD (2027).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.